Bowen Coking Coal completes key money move

Bowen Coking Coal looks set to reach its $70 million target in an equity raise executive chairman Nick Jorss describes as completing the company's plan to strengthen its balance sheet. The equity raising was undertaken to support the Plumtree North mine development costs at Bowen’s Burton mine complex, rail and port prepayments and guarantees, and general working capital requirements. Bowen Coking Coal warned last month that it may not be able to continue as a going concern if it failed to reach a minimum subscription of $60 million and was forced to seek alternative sources of liquidity. In an announcement to the ASX this morning, it said the minimum subscription requirement for the entitlement offer to proceed was expected to be met by the settlement date of November 4. Taurus Mining Finance Fund No. 2, L.P and New Hope Corporation both agreed to increase their sub-underwriting commitments, taking that amount to $49.8 million in total. The company received valid applications for 690,014,827 new shares, raising about $6.21 million from eligible shareholders. Additional subscriptions into a shortfall bookbuild were received for 1,554,429,618 new shares, raising about $13.99 million. “The board would like to thank all participants in the equity raise," Mr Jorss said. "We are grateful for the support of our existing shareholders including Crocodile Capital Funds, Flannery family’s Illwella Group, and importantly over 500 small and mid-sized holders. "We are also very pleased to have the support of our debt holders Taurus and New Hope, who have demonstrated this support by extending payment terms and converting debt into equity. We look forward to welcoming our new shareholders, including Square Marketing, who we will be working closely with to further optimise our coal sales strategy and outcomes." He said this quarter had started well in terms of operations at Burton, with another solid month of coal mining ahead of target in October. "Our cost reduction initiatives are bearing fruit, and the mine plan is being tightly managed as we keep average strip ratios to 7:1 or below," Mr Jorss said. "This discipline has driven our unit mining costs down by over 50 per cent over the past year. "Exposing the Leichhardt and Vermont coal seams in the Plumtree North boxcut area ahead of schedule is another highlight for the business. "This equity raise completes our plan to strengthen the Bowen balance sheet and follows the recent successful debt renegotiation. "The business is now operating at steady state and while optimisation and cost reduction continue, we are now positioned for Bowen’s future as a low-cost producer of high-quality coking coal."

Bowen Coking Coal completes key money move

Industry Queensland

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